Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose on Thursday, with Brent crude touching its highest level in more than two months, supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes.

Brent crude settled up $1.06, or 1.4%, at $77.25 a barrel, its highest price since mid-July. U.S. West Texas Intermediate (WTI) crude rose $1.07, or 1.5%, to $73.30 a barrel.

Prices have rebounded in line with most risk assets after the Federal Reserve said on Wednesday it wouldn’t start reducing its monthly bond purchases immediately – even though its outlook over the next year took a hawkish turn, with more policymakers coming round to the view that it will be necessary to raise interest rates next year.

The most effective prop to the market remains the current tightness in the U.S. spot market, illustrated by a further 3.5 million-barrel drop in U.S. crude stockpiles last week. That was the seventh straight weekly drop and leaves U.S. commercial oil stocks at their lowest since September 2018.

The Bureau of Safety and Environmental Enforcement’s data showed 294,000 barrels a day – one-sixth of total Gulf output – still offline on Wednesday, more than two weeks after Hurricane Ida swept through the region.


At a global level, the death toll from the COVID-19 virus rose to 4.74 Million (+8,632 DoD) yesterday. The total number of active cases rose by 20,000 DoD to 18.59 million. (Click here for details).

Asia’s naphtha crack  eased after crude oil prices rose on growing fuel demand and a bigger-than-expected draw in U.S. inventories.

The refining margin slipped to $136.03 a tonne from $139.90 on the previous day.

In the European physical naphtha markets, Aramco Trading is joining the Platts Market On Close assessment processes, S&P Global Platts said in a note.

The October crack is lower at $3.90 / bbl.

Asia’s gasoline crack inched lower on Thursday as U.S. stocks rose against market expectations, although losses were capped after inventories in Singapore registered a weekly decline.

The crack eased to $7.57 a barrel from $7.72 in the last session.

Singapore light distillates inventories fell by 924,000 barrels to 13.056 million barrels in the week to Sept. 22.

The October crack is higher at $9.10 / bbl.


Click Here for a graphical depiction of Global Gasoline stocks by region.

Asia’s cash premiums for 10 ppm gasoil held close to their highest levels in 14 months on Thursday, buoyed by tighter supplies, while Singapore middle distillate inventories slipped to a two-week low.

Cash differentials for gasoil with 10 ppm sulphur were at a premium of 48 cents per barrel to Singapore quotes, down slightly from Wednesday’s 50 cents per barrel, a level last seen in July last year.

Refining margins, also known as cracks, for 10 ppm gasoil rose for a third straight session on Thursday to $10.85 per barrel over Dubai crude during Asian trading hours, a fresh high since March-end last year.

Singapore’s middle distillate inventories dipped 0.1% to 10.8 million barrels in the week to Sept. 22, according to Enterprise Singapore data. This week’s stocks were 30.7% lower than a year earlier.

Asia’s cash differentials for jet fuel were at a premium of 4 cents per barrel to Singapore quotes, compared with a discount of 1 cent per barrel a day earlier.

The October crack for 500 ppm Gasoil is higher at $9.65 /bbl with the 10 ppm crack at $ 11.15 /bbl. The regrade is at -$ 0.55 /bbl. 

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market dropped on Thursday with the cash premium, front-month time spread and front-month crack all falling to multi-week lows on an improved near-term supply outlook.

According to Refinitiv data in Eikon, the front-month VLSFO time spread fell to a one-month low of $3.25 a tonne, while the crack to Dubai crude dropped to a three-week low of $12.32 a barrel as crude prices continued to firm.

The cash premium for cargoes of the fuel also fell to a more than one-month low of $2.17 a tonne to Singapore quotes amid absent trades in the Singapore trading window and lower supplier offers. 

Onshore fuel oil stocks in Singapore rose by 156,000 barrels, or about 25,000 tonnes, to a two-week high of 21.46 million barrels, or 3.38 million tonnes, according to Enterprise Singapore data. The residual fuel stocks were 9% lower from year-ago levels.

The October crack for 180 cst FO is lower at  -$0.25 /bbl with the visco spread at $2.70 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

No fresh trades today. 

Hedge recommendations are essentially made for refiners. These are not trading positions as such. The rationale of these positions is to lock in extraordinary levels for the refinery.

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About this blog

This blog post attempts to give a top level summary of the Singapore market goings on to a person who seeks to obtain a directional sense of the market on a daily basis.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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